Hong Kong: Retail sales rebound strongly in February
March 31, 2015
In February, retail sales jumped 18.2% over the same month last year, which contrasted the revised 13.8% decline tallied in January (previously reported: -13.9% year-on-year). While February’s expansion represented the largest increase since April 2013, it also reflected the different timing of the Chinese New Year, which fell in mid-February this year and in late January in 2014. The print exceeded the 2.4% increase that markets had expected. The improvement tallied in February was felt in almost all the subcategories of the index, with sales of consumer durable goods and food, alcoholic drinks and tobacco recording the largest expansions. Despite improving, the jewelry and luxury goods category contracted again in February.
A government spokesman explained that, “taking the first two months of 2015 together to remove the distortions caused by the difference in timing of the Lunar New Year holidays, retail sales were nearly flat in volume terms compared to the same period last year. The subdued performance was mainly due to the notable fall in the sales of jewellery, watches and clocks, and valuable gifts, conceivably reflecting the weak tourist spending on big-ticket items.” The official also noted that, “looking ahead, the near-term performance of retail sales is still subject to uncertainties, depending on the labour market conditions as well as inbound tourism growth.
Retail sales fell a seasonally-adjusted 1.1% in the three-month period up to February compared to the previous three months ending in November. The reading contrasted the 2.6% increase recorded in the previous month.
Author: Carl Kelly, Economist